Canadian Western Bank beats analysts’ estimates: see what the consensus predicts for this year
Canadian Western Bank Shareholders of (TSE: CWB) are probably feeling a bit disappointed, as its shares fell 3.6% to C $ 37.03 within a week of its latest annual results. Canadian Western Bank missed revenue estimates by 3.2%, with sales of C $ 989 million, although statutory earnings per share (EPS) of C $ 3.73 exceeded expectations, topping 5 , 0% analysts’ estimates. Profits are an important time for investors because they can follow a company’s performance, look at what analysts are forecasting for next year, and see if there has been a change in sentiment towards the company. Readers will be happy to know that we have aggregated the latest statutory forecast to see if analysts have changed their minds on Canadian Western Bank after the latest results.
Check out our latest analysis for Canadian Western Bank
Based on the latest results, the consensus of seven Canadian Western Bank analysts is forecasting revenues of C $ 1.12 billion in 2022, which would reflect a solid 13% improvement in sales from the past 12 months. Statutory earnings per share are expected to increase 2.8% to C $ 3.76. Before this report was written, analysts had modeled revenues of C $ 1.12 billion and earnings per share (EPS) of C $ 3.86 in 2022. Analysts appear to have turned a little more negative at the regard the company after the latest results, given the slight decline in their earnings per share for next year.
It might come as a surprise to learn that the consensus price target has remained broadly unchanged at C $ 42.58, with analysts clearly hinting that the expected decline in earnings is unlikely to have much of an impact on valuation. It might also be instructive to look at the range of analysts’ estimates, to gauge how different outliers are from the average. Right now, the more bullish analyst values the Canadian Western Bank at C $ 48.00 per share, while the most bearish values it at C $ 39.00. Yet with such a narrow range of estimates, it suggests that analysts have a pretty good idea of what they think the company is worth.
Looking at the big picture now, one of the ways we can make sense of these forecasts is to see how they stack up against both past performance and industry growth estimates. It is clear from the latest estimates that the Canadian Western Bank’s growth rate is expected to accelerate significantly, with an annualized revenue growth forecast of 13% by the end of 2022 significantly faster than its historic growth of 8.5% per year over the past five years. In contrast, our data suggests that other companies (with analyst coverage) in a similar industry are expected to increase their revenues by 3.9% per year. Given the expected acceleration in revenues, it’s pretty clear that Canadian Western Bank is expected to grow much faster than its industry.
The bottom line
The biggest concern is that analysts have lowered their earnings per share estimates, suggesting headwinds could be brewing for Canadian Western Bank. Fortunately, they also reconfirmed their revenue figures, suggesting that sales are moving according to expectations – and our data suggests that revenue is expected to grow faster than the industry as a whole. The consensus price target held steady at C $ 42.58 as the latest estimates were not sufficient to impact their price targets.
Continuing on from this reflection, we believe that the company’s long-term outlook is much more relevant than next year’s results. We have forecasts for Canadian Western Bank through 2023, and you can view them for free on our platform here.
However, before you get too excited, we’ve found out 3 warning signs for Canadian Western Bank (1 makes us a little uncomfortable!) That you should be aware of.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.